Archive for the ‘Gray Davis’ Category

Labor Day Preview: Actual Facts About Job Creation

Wednesday, September 1st, 2010

By Michael Bernick

Over the past year, I’ve been engaged in a research project on the transformation of employment in California since World War II. The project has involved research on the shifting employment relations in California (particularly the breakdown of the employer-employee relation and rise of contingent employment) as well the ebbs and flows of job creation and employment.

The chart below shows the growth and decline of total payroll jobs in California during the five recent Governors, beginning with Jerry Brown …

Among the storylines:

1. Job growth has been strong during the 35 year period under all Governors: Despite several ups and downs during the past 35 years, overall job growth has soared from 7.7 million payroll jobs in January 1975 to a high water mark of 15.2 million payroll jobs in July 2007, and around 14 million payroll jobs today. Job growth has been strong under all of the Governors, including Governor Schwarzenegger, until the current Recession.

2. Job growth was strongest during the 8 years of Jerry Brown’s Administration: The greatest job growth in absolute terms was during the eight years of Governor Deukmejian, when 2.7 million jobs were added. However, the more revealing job number is California’s job growth as percentage of national job growth. This was highest during the 8 years of Governor Brown, when California’s job growth of nearly 2 million jobs totaled 17% of the total payroll jobs added in the United States. California’s percentage of job growth has not been as high since that time.

3. Each of the 5 Governors has seen job growth in California undermined by major downturns in the national economy: In the last year of the Brown Administration, the national economy encountered its worst economic downturn since World War II, with national unemployment climbing to 10.8% in December 1982 (and California unemployment at a corresponding 11%). Similarly, Governor Wilson saw state unemployment climb to 9.9% in December 1992, as the national unemployment rose to 7.4%. For the first nearly three years of Governor Schwarzenegger’s tenure, job growth averaged over 235,000 jobs annually. Since the current national Recession started in mid-2007, California has averaged over 300,000 jobs lost annually, and unemployment today stands at 12.3%, following the rise of the national rate to 9.5%.

Marc Lifsher of the Los Angeles Times recently made reference to the job numbers noted above in a short posting in the newspaper’s online edition. This posting immediately brought forth claims of partisanship by the Whitman campaign, which has been trying to portray Brown as a “job killer”. Fair enough. If the Whitman campaign can show that these numbers are inaccurate or misleading, such should be done.

I have known and periodically supported Jerry Brown since serving as a summer law school intern in the office of his State and Consumer Services Secretary, Leonard Grimes, in 1978. I recall well the job debates and policies of the 1970s and early 1980s. There was then and remains today a real and destructive anti-business wing of the Democratic Party in California. But Brown was not a part of it then, and he is not remotely part of it today.

Michael Bernick is the Former California Employment Development Department Director and Milken Institute Fellow. This piece was first published at Fox & Hounds.

Con Con & Cal Forward: Form vs. Substance

Monday, November 30th, 2009

fred keeley_0102By Fred Keeley
Special to Calbuzz

If not the most devalued word in the English language, “reform” must be in the top 10.

From our governor, to individual and creative mixings and matchings of legislators from both houses and parties, through the news and editorial pages of the last remaining daily newspapers published in California, to a wide assortment of good-doing non-profits and foundations, the Age of Reason (followed by the Era of Irony) seems to have given way to the Time of Reform.

The call for “reform” is even coursing through that “series of tubes,” as Alaska’s former Sen. Theodore “Ted” Stevens once so eloquently labeled the Internet.

Reform health care, the financial system, public education, U.S. foreign policy, (enter your first, second, or third personal favorite here) policy.  And especially that mess we still refer to as the governance of California.

Given that I have not had an original thought in my life, and given the vast amount that has been said and written about the challenges of California’s governance by folks way smarter than me, I will simply stipulate that whatever anyone has to say about what is broken, I agree.

That, of course is where agreement ends and the debate about reform begins. And, since Calbuzz is giving me the opportunity to fulminate about my personal favorites, here goes.

Perhaps I have just been around former Speaker Robert Miles Hertzberg too much, but my initial impulse here is to try to quantify that which cannot be measured.

Two months into that unpleasantness remembered as the energy crisis, then-Speaker Hertzberg said to his leadership team: “If there are going to be 100 units of pain visited on the people of California because of this crisis, and we do everything right and reduce that by 40 units; nonetheless, we will always be remembered as the legislature than visited 60 units of pain on the people.”  (Yes, he actually uses words like nonetheless in conversation.)

If there are 100 units of broken governance, then I’ll charge 35 of those to the people we elect to serve in the Legislature and in state constitutional offices, especially the governor.  The other 65 units are the broken pieces of governance we can call the wiring instructions for contemporary California democracy.

If the problem was really about who we elect, then certainly either Gray Davis or Arnold Schwarzenegger would have to have been placed in our history’s “successful” category.

Davis would be high on your list if your belief system tells you that to succeed in California’s complex and expensive executive branch, we need a person with significant public-sector executive experience.

Alternatively, you’d run Schwarzenegger’s flag up your pole if your belief system says that we really need a strong, independent, self-made type to run a tight, lean, efficient service delivery system.

Sadly, despite all of their varied talents, and their hopes and aspirations for themselves and all of us, the best we will probably be able to honestly say about them is that they meant well.

Sure, Gray moved the dial on ocean protection and a few other important topics.  And, fantastically, Arnold’s lasting legacy will be the great degree to which he moved the dial on global climate change policy.

model-tThe problem is less who we send into the machinery of Sacramento, than the tools we lend to the governor and 120 legislators following their election. We have a broken 2009 Chevy and our mechanic has tools to fix Henry Ford’s Model T.

It doesn’t matter how smart, sincere or dedicated these electeds are: if they only have governing tools from the 19th and mid-20th centuries, they will fail. So if we want to be able to hold our elected leaders accountable, we have to make sure they have the tools to do the job.

There are all kinds of ideas about reform in the public arena.  Two of the most visible at the moment are California’s Forward’s initiatives on state budget process and local government revenue protection, and the Bay Area Council’s proposal for a constitutional convention.  (Full disclosure: I am a founding and still-serving member of California Forward’s “Leadership Council,” which should more modestly be called a board of directors, because that’s what it is.)


The co-chairs of California Forward are the aforementioned Bob Hertzberg, and Tom McKernan, leader of the Southern California Automobile Association. They have worked in good faith with all manner of powerful men and women, at a sustained high velocity, informed by constant and very real community outreach and civic literacy strategies, to produce two essential reforms of California’s existing, out-dated, poorly performing, chronically late and unsatisfying budget process.

California Forward’s product is that which survived a gauntlet-running which did not, mercifully, sand off every hard edge.  While any reform effort that hopes to have a shot at electoral victory must work with everyone, the final product must stand for something (or a bunch of somethings, held together by coherent values).

California Forward’s reform product offers tools to build a very different and positive governance structure built on the best of the state’s populace-based constitution.  The major features include: a bit longer fiscal planning horizon; more accountability imposed on both the executive and legislative branches, and obliging the legislature’s majority party to work constructively with the governor to produce a timely and more financially sustainable budget.

The other reform energy center is the popular notion of a constitutional convention.

According to polling, a substantial and impressive percentage of likely voters really likes this idea.  The existing constitution would be amended to add “some assembly required” language — stuff like how the delegates are selected, what they could make decisions about and what can make it back out to us, as voters who would have to ratify any notions advanced from the convention.  There are powers long ago, awkwardly etched into our state constitution which is ever-growing, increasingly less inspiring and much in need of – dare we say it? — reform.

Either of these ways of getting to the place where there is a spirited debate and decision by the voters is an outstanding idea.  The difference between the two is the difference between substance and form.  This is not a comparative judgment of either.  They are not the same.

Cal Forward is pushing substantive proposals flowing from the contemporary state of agreement regarding meaningful budget and fiscal reform of the miserable budget process we all seem to loath.

The Bay Area Council’s Con-Con proposal is about form and it takes more time.  It may (or may not) produce the same or similar set of budget and fiscal reforms.  The Con-Con could give us a better outcome, or not.

It’s not as if we’ve had about all the reform we can take.  It seems more like we ain’t getting enough.  Let’s get on with all of it.

Fred Keeley is the elected County Treasurer of Santa Cruz County.  He is also a member of the Leadership Council of California Forward.  A former legislator from Santa Cruz, he also teaches at San Jose State University and Pacific Collegiate School, a public charter school.

Why Arnold’s “Legacy” Claim is a Fraud

Monday, July 27th, 2009

arnoldcigarThe day before the Legislature passed the third patchwork version of California’s budget in 10 months, Gov. Schwarzenegger took to “Flashreport,” the state’s leading conservative web site, to claim “a huge win.”

“(T)he biggest winner to emerge from our negotiations is California,” the governor bragged, “our state’s legacy, its priorities, and its budget stability.”

Wrong, wrong, wrong!!

Schwarzenegger’s triumphalist braying was little more than a one-step-ahead-of-the-posse exercise in spin control, a pathetically transparent bid to establish a positive narrative for the budget disaster over which he’s presided, in hopes that voters and his suck-up pals in the national media will buy his story without bothering to check it out.

(NOTE TO NATIONAL POLITICAL WRITERS: Schwarzenegger did NOT solve or stabilize California’s budget. Despite his assertion to the contrary, his budget – passed in February and now revised twice – actually RAISED TAXES by $12.5 BILLION. With the latest revision, he threw off enough ballast to keep his hot air balloon afloat but in no particular direction.)

As Fred Keeley, the elected treasurer of Santa Cruz County, put it:

“The governor set the standard when he said, at the start of the process, that this needs to be a complete solution. And then he violated his own standard by signing a budget which doesn’t solve the problem this year or next year and in fact, according to the Legislative Analyst and the Department of Finance, is going to create a multi-billion-dollar deficit next year.”

Keeley knows wherearnoldbuckof he speaks. He served on the Assembly Budget Committee for six years, was asked by former Gov. Gray Davis to be Finance Director and is a Senate appointee to the Governor’s 21st Century Commission on the Economy.

In truth, Arnold’s entire tenure has been one continuous failure of leadership. This is just the latest chapter.

From his first days in office (when he sowed the seeds of today’s never-ending fiscal crisis by his irresponsible cut in the vehicle license fee) to his ill-considered $15 billion borrowing bond (which helped make interest payments the fastest growing item in the budget) and his current shameful spending plan (which gives the University of California a major push into mediocrity while continuing the slow death of K-12 education and punishing the aged, blind and disabled), he has been little more than a narcissistic, tone-deaf poseur, surrounded by sycophants and devoid of principle or conviction.

At a time when the state’s economy is hemorrhaging, its schools failing and roads crumbling, Schwarzenegger has been utterly ineffective in explaining to Californians the reasons behind the problems we face, and even less so in proposing innovative solutions to any of them. His little touchdown dance about the current budget belies the painful truth that this is nothing but a stop-gap maneuver designed to escape the embarrassment of issuing IOUs and con the credit markets into a few months of cash to ease the state’s borrowing jones.

Schwarzenegger’s soaring claims about the wonders worked by his budget fail on three grounds:

1. It’s a short term fix. Amid all the high-fives and chest bumps in the governor’s circle, it’s important to recall that the latest budget plan comes just five months after the last one, which came only five months before the previous. In other words, California has had three budgets in less than a year and, given current revenue trends, it’s all but certain that Arnold and the gang will be back in the fall for yet another round of all-nighters. Filled with gimmicks, borrowing and Grand Theft from schools and local government, the “huge win” for California being trumpeted by Schwarzenegger is nothing but more of the same old same old.

2. It does nothing to address the state’s dysfunction. As Calbuzz has reported the ongoing budget mess is a symptom of a far more fundamental disorder – a state of permanent ideological gridlock shaped by term limits, gerrymandering and three decades worth of wrong-headed initiatives. The latest “drama” over the budget is just another re-run of Groundhog Day, and it will keep re-playing and replaying until the pols in the Capitol acknowledge and accept the need for fundamental reforms, and find the cojones and the political skill to sell them to their constituents across the state.

3. It will probably make things worse. While it is true that the state for years has had a structural deficit, caused by the governor and the Legislature’s effort to defy the laws of arithmetic, it is also true that the huge magnitude of the current deficit is overwhelmingly caused by the current recession, which slashed state revenues by nearly one-third in one year, reducing tax collections to the level of a decade ago. The bursting of the real estate bubble, and the structural decline of the economy that has followed it has put the entire state economy into treacherous territory that may yet turn into a full-blown depression.

Under these conditions, there’s a strong argument to be made that wholesale cuts that the budget delivers will make the recession more punishing: as layoffs of public employee push the unemployment rate higher, furloughed state workers spend less, as all the programs set up to help with those who fall on hard economic times are cut back at the very moment they’re needed most.

As Calbuzz reported about the latest forecast by California economist Bill Watkins: “California’s budget issues are likely to be made worse by continuing economic decline. Perversely, the budget then negatively feeds back into the economy. The problem is not likely to see relief, at least in terms of increased revenues, before late 2011.”

Just In: Kennedy Whacks Davis, More on Gov Money

Thursday, July 2nd, 2009

kennedycigarNasty Ringer from inside the Horseshoe: So Calbuzz is reading along Wednesday in the Wall Street Journal’s slobber job on Gov. Arnold’s COS Susan Kennedy and suddenly — KABOOM! — she smacks her former patron Gray Davis upside the head with a crowbar:

“Gray Davis would still be governor today if he had the chops [i.e. “balls”] to stand up to the unions and if the Democrats weren’t so pig-headed and owned by the special interests,” said the diminutive cigar-chomping Ms. Kennedy.

This, from a putative Democrat who owes her job to Davis, who made her his cabinet secretary, deputy chief of staff and then put her on the PUC. Kennedy is no press rookie either — having been communications chief for US Sen. Dianne Feinstein before going to work for Davis in 1999.

Kennedy also knows – as well as anyone – that while the CCPOA, CTA and AFL-CIO all had their hooks into Davis (and her), had it not been for Enron and the energy crisis, Davis never would have lost his job.

We tried to get a reaction from Davis but he wouldn’t bite. “I’m not going there,” he insisted. gray-davis“I’m a senior statesman now. I don’t get into disputes.”

An associate of his at Loeb and Loeb in LA, however, said Kennedy sent an email apology to Davis. And a friend of Kennedy’s in Sacramento said she had been trying to aim her fire at the unions (who had made life difficult for the penny-pinching Davis) and felt terrible that she shot her former boss in the face instead.

As long as we had Davis on the phone, we asked him if he wasn’t feeling just a little bit of schadenfreude watching Gov. Schwarzenegger try to handle the budget he so loudly pledged to streamline.

Again, he wouldn’t take the bait. “I don’t take any glee in seeing the difficulty Californians are facing,” Davis said. But, he noted, “It’s abundantly clear that just because you change governors you don’t change the financial condition of the state.”

megcrop1The Meg and Jerry Show: The preliminary numbers on first round fund-raising are in and, as expected, Meg Whitman is dominating the GOP Money Primary, reporting contributions of $6.5 million in the first five months of her campaign. That amount is in addition to $4 million she has donated herself.

The numbers reported by the campaign do not make it clear how much she has spent, with what appears to a much higher overhead operation than any of her rivals, nor does it say how much eMeg has in the bank.

Our Monday post on the Money Primary offered some caveats about over-interpreting Whitman’s big haul, but by any measure it’s an impressive effort by a rookie candidate, and her spin posse took full advantage, quoting campaign chairman Pete Wilson: “There is no more certain measure of enthusiasm for a candidate than heavy early campaign contributors.”

Republican foe Steve Poizner reported raising $1.2 million to date, and pointedly noted that most of his contributions were $100 or less in contrasting his strategic approach to that of Megabucks Meg, a fellow member of the uber-wealth club.

” “Our campaign has focused heavily on generating support at the grassroots level from hard-working California voters and these numbers reflect our success in earning that support,” the  insurance commissioner said in a release. “We will have the funds needed to communicate our message throughout the state, from now to the primary and beyond.”

Republican Tom Campbell, who’ll spend the campaign with his nose to the windows of the counting houses of his two party rivals, said he had raised just under $500,000, had no debts and about $300,000 cash on hand.

As we reported yesterday, General Jerry’s $7.4 million haul exceeded expectations, and dwarfed the $1.6 million raised by Gavin Newsom, who joined Poizner in talking up the number of small donors who’d given him cash.

But here’s a worry for Newsom: He has thus far raised $2.8 million and reported $1.1 million cash on hand. If our Calbuzzer math is right, that would mean he has spent $1.7 million –- or about 60% of his money raised. Yow, that burns.


Times Weighs In: On the other hand, Gavin Hood cops the cover photo of this Sunday’s New York Times magazine, featuring Mark Leibovich’s 8,300 word situationer on the California governor’s race.

Leibovich, formerly of the SJ Mercury News, is a graceful writer and a fine reporter, and his piece provides a solid one-stop fill, bristling with good quotes and anecdotes, about where the 2010 race stands, at least for that small handful of Californians who have inexplicably failed to follow Calbuzz in recent months.

At first glance, Newsom comes off as the big winner of the piece, both because of the Nixon Redux, guy-on-the-beach-in-a-suit photo that graces the cover, and because the San Francisco mayor is also the entry point into the Times story.

“Newsom sees the job of governor as a potentially exhilarating high-wire act,” Leibovich writes. “’We’re in a moment of crisis that requires order-of-magnitude change, dramatic change,’ he told me. ‘Candidly, if things were going very well, I don’t think I’d be the best person for the job.’”

But Newsom’s political vulnerabilities, from his Prince Gavin sense of entitlement to his unease in discussing the adulterous affair he had with a top aide’s wife several years ago, also clearly come through.

“There is indeed about Newsom something of that quintessential California type, the overgrown and hyperactive child,” the piece reports. “Immensely gifted but flawed, he is a jumble of self-regard, self-confidence and self-immolation – potential greatness and a potential train wreck in the same metrosexual package.”

Leibo interviewed all of the contenders, as well as Gov. Arnold, and the up-close-and-personal treatment he affords each of them is worth the price of admission.

From Jerry Brown’s recounting of receiving advice from the Big Dick (“’Richard Nixon once said to me, ‘Don’t peak too soon,’” Brown said) and the tiresome sameness of Meg Whitman’s cipher campaign (“All of her campaign events appear to be held in the exact same ballroom, whether they are in a Radisson, a Hyatt or a Doubletree”) to Steve Poizner’s bummer-dude manner (“On behalf of Californians, I apologize to the rest of the country”) and Tom Campbell’s terminally earnest hopefulness (“Campbell said that a large field of candidates will help him”), the Timesman offers telling glimpses behind the masks of the candidates.

IOU an explanation: Amid the thousands of dead trees sacrificed to reports that the state has started issuing IOUs’, the most valuable piece of journalism has been offered not by the political press corps but by Chronicle business columnist Kathleen Pender.

You can find Pender’s smart Q&A about the IOU situation here

Davis Bullish on Wider Sales Tax, Bearish on eMeg

Friday, June 5th, 2009

graydavis1It’s not often that former Gov. Gray Davis makes news, but in a low-key appearance with Erin Burnett on CNBC’s “Street Signs” Friday, California’s recalled chief executive made several observations worth noting on taxes and the governor’s race.

Asked by Burnett – who seemed fixated on blaming the initiative process for all that ails the state – Davis pointed squarely to the 2/3 vote requirement to pass the state budget and California’s dependence on income taxes as the culprits.

“Fifty percent of our income tax comes from the top one percent (of taxpayers) and they pay us a lot of money when the market is doing well and real estate is doing well, neither of which are happening right now. So that’s a very volatile tax,” Davis said.

“But the sales tax is very predictable and I think you’ll see Governor Schwarzenegger’s tax commission come back and recommend that the sales tax be lowered and widened. Meaning that law firms, accounting firms — any service — when you go get your car repaired — all that will be subject to a sales tax. And I think that will be a much more dependable that will even out the ups and downs we experience.”

Mark those words, Calbuzzers – lower the sales tax rate and widen its application. Don’t be surprised if Arnold’s Parsky Commission recommends a similar change, linked to something like a small reduction of the capital gains tax – the combination aimed at increasing and stabilizing tax revenues.

Since it was Erin Burnett and a business show, Davis was also asked if he thought former eBay CEO Meg Whitman would make a good governor.

Davis: (pause) “Uh, she may be. I know her. She’s a good person. Outsiders have not had a great track record in winning in California or governing that effectively. People like to say it’s like running a business but if it was, government would run more efficiently. But I think people tend to change and after a Republican governor I think they’ll be looking for change, so I think Democrats have a better chance in 2010.”

So says Senior Statesman GGD.